Why don't firms want to cut nominal wages?
A. Because they don't want to decrease worker morale
B. Because laws in many states prevent it
C. Because there is never any reason to cut nominal wages
D. Because renegotiating wages is a costly process
Ans: A. Because they don't want to decrease worker morale
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Xenonia has a larger supply of labor than Techland. If the labor supply in both the countries increases by the same amount while their capital stocks remain unchanged, ________
A) the increase in Techland's output will be more than the increase in Xenonia's output B) the increase in Xenonia's output will be more than the increase in Techland's output C) Xenonia's income per capita will decrease while Techland's income per capita will increase D) Xenonia's income per capita will increase while Techland's income per capita will decrease
The "Normal-Form" of a game is a description including
A) the players. B) the strategies possible. C) the payoffs. D) All of the above
The efficiency wage is
A) lower than the market-clearing wage, to penalize shirking. B) higher than the market-clearing wage, to penalize shirking. C) lower than the market-clearing wage, to allow managers the resources to monitor shirking. D) higher than the market-clearing wage, to reward workers for informing on others who shirk. E) lower than the market-clearing wage, because of shirking done by managers.
The economist who won the Nobel Prize in Economics in 1995, and whose name is closely connected with rational expectations theory, is
A) Robert Solow. B) Paul Samuelson. C) Milton Friedman. D) Robert Lucas. E) John Maynard Keynes.